This time last year Chile’s lesser-known vegetable industry established a dedicated producer organisation called Hortalizas de Chile (Vegetables from Chile), or Hortach in short, to unite growers across 13 producing regions in the South American country. Led by Cristián Muñoz, Hortach is looking for long-term relationships with UK buyers and aims to transform the market for Chilean vegetables by developing a “world-class production base”. Produce Business UK speaks with Muñoz to find out more
Chile produces a range of vegetables for export, primarily onions, garlic, tomatoes, radicchio, peppers, celery and others such as lettuce, cauliflower, broccoli, Brussel sprouts and asparagus. There is also an emerging fresh-cut vegetable industry, with at least four senior-level companies involved in this production sector.
The South American nation exports these vegetables to markets including the UK, France and the US, and Cristián Muñoz, who is also general manager of grower Hortofrutícola Sudamericana, sees great potential to continue supplying the UK in particular, between February and May.
“In the long-term, we hope to turn the Chilean vegetable sector into a point of reference within Latin America,” he explains. “The UK market is one of the most important [destinations] for Chilean vegetables. There are large companies within the fresh-cut industry who have bought some commodities from Chile for more than 15 years.”
Long-term partnerships required
At present, however, Muñoz admits that Chile’s UK-bound vegetable exports are small, albeit regular. Annual sales value never exceeds US$5m (£3.3m), according to data from ProChile. In order for the trade to expand, he claims Chile needs to find UK buyers – importers, foodservice operators and retailers – who are willing to establish longstanding and even exclusive relationships to give suppliers stability.
“The business varies considerably during periods of high production for our competitors, like Peru,” he says. “This disincentivises Chilean producer-exporters from taking risks and producing exclusively for the UK market. Chile needs to work to the long-term with buyers who are interested in developing relationships over time. This is only way suppliers can permanently comply with all the certifications like GlobalGAP, Tesco Nature’s Choice, Leaf and Sedex, since they have to be obtained from one year to the next.”
The UK opportunity for Chilean vegetable suppliers therefore lies with long-term production agreements with buyers; starting with small volumes in order to develop the market in a coordinated and united approach.
“The spot market isn’t an opportunity,” points out Muñoz. “For those buyers, there are few possibilities. But for those that want to develop a 12-month vegetable supply, and make the most of Chile as a counter-seasonal supplier, the potential is enormous.
“Chile can count on a lot of air and sea trade flow to Europe between February and May, which means suppliers can also take advantage of existing logistics to deliver Chilean vegetables to the UK market.”
Competitive advantages
Chile may seem like a faraway nation to trade vegetables with the UK when traditional suppliers like the Netherlands and Spain sit right on the doorstep, but Muñoz points out that Chile’s appeal lies in its ability to fill counter seasonal windows that Europe cannot.
“We’re in the opposite hemisphere, which awards us a great competitive advantage,” he points out. “Chile can produce whatever vegetable is needed during the counter season when it’s difficult for Europe to produce. Chile is the perfect partner to complete a year-round production supply of whichever vegetable.”
Muñoz says another production benefit is the number of different microclimates that exist in Chile thanks to the nation’s geography. “We have a Mediterranean climate – one of the few that exist in the southern hemisphere – with well defined seasons,” he explains. “There’s rainfall in winter and summers are dry, which guarantees the production of excellent fruits and vegetables with unique organoleptic qualities. These are Chile’s competitive advantages over other countries and it’s something we want to explore.”
Thanks to Chile’s unique phytosanitary position, Muñoz believes Chile can also be a trusted supplier for the UK where the demand for food safety is notoriously high. “Chile is basically an island, with the Atacama desert in the north, the Andes mountains in the east, the Pacific Ocean to the west and the Antarctic in the south,” he points out.
“For decades the government has insisted on clean production and food safety and these are standards which are impossible to violate today. Chile is also known for being a country that’s open to the world. We have the most open economy in Latin America, and the vast number of free trade agreements and commercial ties have allowed the majority of our agricultural products to enter markets tariff-free.
“This all makes Chile an attractive supplier of fruits and vegetables,” he continues. “The UK market has high standards when it comes to certification and clean production, and Chile has achieved this point of difference among its competitors.”
Going forward and by working as an organisation Hortach plans to focus mainly on food safety and the rational use of soils and water in Chile’s vegetable production. In addition, the initiative seeks to strengthen and harness the transfer of technical information, as well as improve access to projects and new markets. In particular, Hortach is keen to explore further niche, high value and quality-driven markets both within Europe, North America and Asia, as well as across South America.
Currently, the organisation, together with Fedefruta (the Chilean association of fruit producers), is working on a clean production project with close to 100 growers to improve the growing conditions for fresh vegetables. Under the plan, the duo are encouraging better systems of irrigation and use of water, enhanced control over critical points of contamination, and the construction of appropriate packhouses with sanitation systems and food safety protocols.
Hortach operates under the auspices of Fedefruta and was relaunched in 2014 following its original inception in 2004 to encourage Chilean vegetable growers to group together. Since then, the organisation has been well received by the country’s vegetable industry and already comprises approximately 60 growers; primarily medium-sized producers for supermarkets and processors in the fresh-cut sector. The vast majority have GlobalGAP accreditation.
More information on Chilean vegetables:
Onions
Radicchio
Sweetcorn
Tomatoes
Read the other articles in PBUK’s Sourcing Spotlight on Chile:
Chile is not about to forget importance of UK fruit buyers
The UK remains an important market for Chilean fruit
Blueberries from Chile looks for convenient boost in UK
Chilean kiwifruit breeding programme looks to supplement Hayward strength
Chilean walnuts and prunes have UK niches in sight
Gesex to offer varietal and quality improvements for UK buyers
Chile’s grape sector looks to expanded UK future with fresh varieties
